I’ve seen the future of retail. And it’s not all online, not by a long shot.
First, let’s deal with the elephant in the room. Yes, traditional brick-and-mortar retailers are confronted with challenges on multiple fronts. Adapting stores to accommodate today’s digitally savvy and demanding customers is no easy feat.
But it’s a task that some retailers have taken head on by focusing on the in-store customer experience. From digital enhancements to unique customization options, these are stores that engage and immerse shoppers in a way that online cannot match. Here’s a few examples that caught my attention:
Adidas, New York City: Sleek and ultra-modern looking, this 45,000-sq.-ft. flagship is the brand’s largest and most immersive store yet. Inspired by high school stadiums, high-school reminiscent bleacher stands for live game viewing on big screens, locker room-styled dressing rooms and track and turf sections for trying out products. Among the most popular features: kiosk stations to design custom sneakers.
Anthropologie & Co., Walnut Creek, Calif.: Anthropologie’s bohemian-inspired visual artistry is on full display in the brand’s new format, Anthropologie & Co. The approximate 30,000-sq.-ft. store offers a complete lifestyle experience, from 12 fully decorated room vignettes to a bridal shop to a shoe salon. There’s also an in-store design center staffed by a home stylist.
Neiman Marcus, Fort Worth: The 95,000-sq.-ft. space is Neiman Marcus’ most digitally advanced, with high-tech “smart” mirrors used throughout apparel, beauty and even the sunglass department. Interactive digital directories are found at store entrances.
Nike, New York City: Nike’s new five-level, multi-sport outpost in SoHo is something to see — and experience. The 55,000-sq.-ft. store is an immersive playground where shoppers can do everything from taking a virtual run in Central Park to shooting basketballs amid the sights of the city’s iconic basketball courts. There’s a dedicated service space for customers to consult Nike experts, a personalization studio, a women’s boutique with personal styling services and enhanced fitting rooms with adjustable lighting.
Rent the Runway, New York City: Smart and stylish looking, the space merges the apparel rental company’s digital assets (including its app and website) with physical elements. The end result is a very personalized customer experience, one based on each shopper’s unique needs and past interactions with the brand.
Yeti, Austin: A cool store from a cooler (literally) and drinkware company, Yeti’s first physical outing celebrates the 12-year-old brand. The 8,000-sq.-ft. space includes an indoor-outdoor bar, a stage for live events and a customization counter. It also features prized artifacts and possessions from the company’s colorful founders.
Displays and exhibits bring the brand to life, down to a video that shows a Yeti cooler being dropped from on high, exploded and set on fire — and still surviving. The brand’s drinkware is displayed in a giant replica of one its mugs that has been cut in half so customers can see how it’s made.
Yeti is colorful, eccentric, a little bit wacky and completely unique. It’s also fun to shop. That makes it pretty wonderful in my book.
Apple’s Spaceship to Land
Apple will open its highly anticipated new campus in April. Dubbed Apple Park, the site is located on a 175-acre site in Cupertino, Calif.
The heart of the campus is a futuristic, ring-shaped, 2.8 million-sq.-ft. headquarters building that’s clad entirely in panels of curved glass. Designed in collaboration with Foster + Partners, Apple Park is powered by 100% renewable energy. With 17 megawatts of rooftop solar, the campus will run one of the largest on-site solar energy installations in the world.
It is also the site of the world’s largest naturally ventilated building, which is projected to require no heating or air conditioning for nine months of the year.
Ikea Expands Solar Portfolio
A new solar project will make Ikea the largest non-utility solar owner in the state of Ohio. The home furnishings giant is installing solar panels atop its future store in Columbus, Ohio — due to open in summer 2017. It will be the second Ikea solar array in Ohio. The chain installed a 1.026-MW rooftop array at its Cincinnati-area store in 2012.
REC Solar will develop, design and install the solar power system at the Columbus store, which is being built by Pepper Construction. The 213,000-sq.-ft. solar array will consist of a 1.21 MW system, built with 3,546 panels, and will produce approximately 1,447,700 kWh of electricity annually for the store, the equivalent of reducing 1,017 tons of carbon dioxide.
The installation will be Ikea’s 46th solar project in the United States, contributing to the Ikea solar presence atop nearly 90% of its U.S. locations, with a total generation of more than 40 MW. Ikea owns and operates each of its solar PV energy systems atop its buildings.
The Home Depot Farms Wind Power
On the Los Mirasoles Wind Farm near McAllen, Texas, with windmills that stand taller from tip to base than the Statue of Liberty, The Home Depot is harvesting enough electricity to power 100 of its stores.
The project, done in collaboration with EDP Renewables North America, is the home improvement retailer’s first major investment in a wind-powered renewable energy project. Along with supplying power to 100 stores, the deal provides $150,000 in local community benefits, according to The Home Deport.
Through a 20-year power purchase agreement, Home Depot’s annual purchase of 50 MW is a fifth of the wind farm’s 250 MW capacity. Under the retailer’s renewable energy initiative, its goal is to procure 135 MW of various renewable energy sources, including wind, by the end of 2020.
In Delaware and Massachusetts, Home Depot collects energy from solar farms to the tune of 14.5 million kWh per year. Also, more than 150 stores and distribution centers use on-site fuel cells that produce about 85% of the electricity needed to power each store.
Target Tops in Solar Capacity
Target Corp. has knocked Walmart off its perennial top spot in an annual ranking of the U.S. companies with the most solar energy capacity. Target now has 147.5 MW of installed solar capacity, according to the Solar Energy Industries Association’s 2016 Solar Means Business report, which ranks companies based on capacity through the third quarter of 2016.
It’s the first time Target grabbed the No. 1 spot in the report’s five-year history. The discounter added nearly 70 MW of solar in that time segment, more than any other U.S. retailer.
“We’re incredibly proud of the progress we’ve made in improving building efficiencies and reducing environmental impact,” said John Leisen, VP of property management at Target. “Our commitment to installing solar panels on 500 stores and distribution centers by 2020 is evidence of that progress.”
Walmart finished close behind Target, taking the No. 2 spot with 145 MW of installed solar capacity.
Going Against the Grain
At a time when many retailers are cutting back on brick-and-mortar investments to focus on e-commerce, a few notable ones are taking the opposite approach. They are launching large-format experiential stores to immerse customers in the full brand experience and offer items in each product category, from couches to dresses.
Such stores are engaging shoppers by making the customer experience the focus. Anthropologie, for example, is working to provide a unique experience that includes full-service shops and access to online-only merchandise in its new Anthropologie & Co. stores.
For retailers considering expanding their store layouts — or even retailers with no current plans to do so — understanding what makes large-format experiential stores successful can provide valuable insights to improve brick-and-mortar operations. With an effective strategy in place, such stores have the potential to offer several key benefits and keep custom ers coming back. Here are some tips:
Create a unique experience
Large-format experiential stores can lead to an unparalleled shopping experience. With a wider range of inventory and plenty of room to shop, each section of the store is meticulously designed and curated for the shopper.
Anthropologie’s experiential format includes a full beauty section, petites selection, shoe and accessories salon and jewelry store. It also includes a home section, with fully decorated “rooms,” including bedrooms, living rooms and dining rooms.
This wide variety of options gives customers the opportunity to customize their experience to fit their personal needs, ultimately building customer loyalty. It also enables customers to imagine what certain pieces that usually only appear online — such as furniture — might look like in their own homes.
Offer more than merchandise
In addition to including a wider variety of merchandise than a typical store, some experiential stores go beyond merchandise when it comes to pleasing their customers. For example, Restoration Hardware included an upscale restaurant and café at its RH in Chicago. The location has become so successful that the retailer has added eateries to additional gallery locations.
These stores provide value to the customer throughout their entire in-store experience, whether through a seamless shopping or dining experience. Other retailers can learn that offering customers a full brand experience — and encouraging customers to return time and time again — can go beyond expanded inventory and layout. It is about creating a unique experience that customers can’t get through online shopping.
Focus on check-out convenience
While many consumers have been receptive to large-format stores, it’s important that retailers set themselves up for success by avoiding making the stores feel too big. Though convenient, large stores with endless merchandise can be overwhelming for both employees and customers.
Large-format experiential stores give shoppers the opportunity to find and check out items that they might want to order online, but are concerned about size, fit and function. While these stores — which can be 25,000 sq. ft. or more in size — are meant to hold maximum inventory, successful retailers have made the space feel personal with their design layout and customer service.
Brick-and-mortar stores both small and large can make their shopping spaces feel more personal by having plenty of staff roaming the store to assist customers via the use of mobile POS devices, such as tablets, to help find or purchase items.
Customer service and simple payment options are key to large experiential formats and online retail success because shoppers tend to place the highest value on flexibility and convenience. In Worldpay’s recent Pay That Way study, shoppers revealed that they make purchasing and payment decisions based on availability (18%), speed (13%) and convenience (15%). If the customer experience is inconvenient, there’s a chance customers might not complete transactions or return to a given store in the future.
Mark Bergneris the director of product strategy at Worldpay U.S.